Wall Street drops on China’s lending curbs, IBM’s disappointing forecast

Apple Online Store“U.S. stocks slid on Wednesday and the Dow suffered its worst drop of 2010 due to fears that China’s curbs on bank lending might jeopardize the global economic recovery, while IBM’s outlook sparked caution about the technology sector,” Ellis Mnyandu reports for Reuters.

“Chinese authorities have ordered some major banks to curb their lending over the rest of this month after an early burst of credit, banking industry sources said,” Mnyandu reports. “Although IBM posted a stronger-than-expected quarterly profit late on Tuesday, investors had misgivings about its guarded 2010 outlook, sending the stock down nearly 3 percent.”

“The Dow suffered its largest daily percentage decline since late December, while the Nasdaq took its largest daily percentage loss in a week. It was the worst drop for the S&P 500 since Friday,” Mnyandu reports. “On Tuesday, the Dow and the S&P 500 ended at 15-month highs on bets the Democrats would lose a Senate seat.”

Mnyandu reports, “Earlier on Wednesday, the major indexes had dropped about 2 percent or more, but recovered some ground in the last hour of the session, thanks to some buying of bank stocks… IBM was the Dow’s biggest drag… On the Nasdaq, Apple Inc. was the heaviest weight, down 1.5 percent at $211.725. Other tech bellwethers off 1 percent or more were Google, Microsoft and Cisco.”

“Investors have counted on emerging economies like China to underpin a nascent global recovery, so any restrictive policy there could be a setback for investors whose bets on a sustainable rebound recently propelled the S&P 500 to 15-month highs,” Mnyandu reports. “Healthcare stocks, which led an advance on Tuesday on signs that a healthcare overhaul could face new hurdles in Congress, declined on Wednesday as some investors booked profits.”

Full article here.

22 Comments

  1. I thought the stock market was going to blast through the sky because a Republican got elected to the Senate. Better spin, spin, spin!

    Could it be that election results really don’t do diddly-squat to the market?

    And what does this have to do with Mac coverage, anyway?

    ——RM

  2. Ha! And the “experts” were saying the market would have a blue-chip day because of the Massachusetts disaster yesterday. On the contrary, the market nosedive today is the correct response to pounding yet another nail on the coffin of this country’s demise. How a state like Massachusetts can elect a Cosmo puffball model with the savvy of a pigeon is… well, come to think of it, it fits perfectly with a country that voted Bush into office a few years ago. All we need now is Palin to really straighten out what’s wrong with this country!

  3. Remember, Wall Street analysts guessing why the market went up or down on a particular day are no smarter (or more perceptive) than the Wall Street analysts who critique an unannounced, unseen Apple product a week before it’s even announced.

    So if the market soared today, it would have been because a terrible candidate lost in Massachusetts to a Republican. And if the market tanked today, it would have been because a terrible candidate lost in Massachusetts to a Republican. Makes as much sense as anything else, I guess.

    @ Renaldo – if this site could let me “fan” you, I would! Nice post…

  4. “If China doesn’t lend us money, who is going to pay for Dems socialism plans”

    ..the same people who will pay the billions to Wall Street bankers, the health insurance industry execs, the doctors driving around in their $100,000 cars, and of course the billions to clean up Bush’s wars. Oh, and we need someone to pay the millions for all the Republican propagandizing to dupe the millions of fools screaming socialism. Let’s see, how much was Limbaugh making this year?

    I’m really glad these anti-socialists are so peaches and cream American, friggin’ war-mongering fascists…

  5. “I thought the stock market was going to blast through the sky because a Republican got elected to the Senate. “

    The stock market dipped because the Dollar has significantly strengthened for two straight days.

    The market prefers a weak dollar which is better for US exports.

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